Hotels Moving Into Old Buildings by AMY ZIPKINMARCH 10, 2014
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BUSINESS DAY Hotels Moving Into Old Buildings By AMY ZIPKINMARCH 10, 2014 The vault from the Cotton Exchange is used as office space at the Cotton Exchange Hotel in New Orleans. Credit William Widmer for The New York Times Reuse and recycle are taking on new meaning for hotels. The Lamb’s Theater, a longtime fixture on West 44th Street inside the Manhattan Church of the Nazarene, is now the luxury Chatwal Hotel. In Philadelphia, the previously empty Lafayette Building near Independence Hall opened in 2012 as the Hotel Monaco. In New Orleans, new life is being breathed into the Cotton Exchange Hotel off Bourbon Street. As the hotel industry shakes off recession doldrums and new hotels are being built, the once-standard chain hotel has a sibling, hotels repurposed from existing buildings like offices, warehouses and hospitals. Behind the push is the changing tastes of younger travelers, who flock to cities and are bringing an urban sensibility to their accommodations. “Travelers don’t want consistency and reliability to come at the expense of authenticity,” said Henry Harteveldt, a travel analyst for the research firm Hudson Crossing. The adaptive-use hotel is a presence in smaller cities like Amarillo, Tex.; Pittsburgh; and Stamford, Conn.; as well as big cities like New York, Washington, Boston and New Orleans. “Brands have realized standardization doesn’t mean as much to guests as it did in the past,” said Bjorn Hanson, divisional dean of the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University. Executives at Marriott estimate that 10 percent to 20 percent of their Courtyards opening this year will have had other uses. The Kimpton chain estimates at least a dozen of its 60 properties are repurposed buildings. And in Europe, the InterContinental Hotel Group converted 82 of 187 buildings from 2010 to 2013. For guests, forgoing the standard hotel template can mean architecturally intriguing features, like odd-shaped hallways, rich history and character, as well as better amenities like a restaurant that draws patrons from the surrounding neighborhood. But for those accustomed to homogeneity, the experience may be mixed. John W. Eskew, who runs a design firm in Bridgeport, Conn., found that the wall heater in his room on a recent visit to the four-year-old Hotel Zero Degrees in Stamford “made a loud hum that made it hard to sleep,” he said. The building was previously a Y.M.C.A. dormitory. (The developer and owner of Zero Degrees, Randy Salvatore of RMS Companies in Stamford, says new individual wall units were placed in rooms when the hotel was renovated four years ago.) Still Mr. Eskew gave high marks to the hotel management for their responsiveness. Trading began at the New Orleans Cotton Exchange in 1871. It was listed on the National Register of Historic Places in 1977. CreditWilliam Widmer for The New York Times Experts say it can often be quicker and less expensive to repurpose an existing building than to build a new one. Even when the cost is higher, “the tax advantage evens that out,” said Janis Milham, senior vice president for modern essentials and extended stay at Marriott International. Some chains turn to the Federal Historic Preservation Tax Incentive Program of the National Park Service, administered with the Internal Revenue Service. It grants tax credits of up to 20 percent that can be used to help finance the rehabilitation of historic buildings to preserve their character. (The federal program, which is available in all 50 states, can also be piggybacked onto state historic tax credits that over half the states have.) A historic building need not be converted to a hotel, although about 4.5 percent of the tax credits are used for that purpose. The dollar amount spent on conversions, including hotels, rose to $6.7 billion in 2013 from $5.3 billion in 2012, according to statistics from the National Park Service. One developer who has used the program is Mehul Patel, chief executive of NewcrestImage, a developer in Irving, Tex. He converted the Fisk Medical Arts Building in Amarillo, Tex., to a Marriott Courtyard in 2010. He said the project in Amarillo created a sense of nostalgia for some guests. “They understand history and respect it,” he said. He has turned his attention to the 150-year-old Cotton Exchange in New Orleans. He expects to begin work directly and will spend more than $10 million in improvements to the building. He anticipates the hotel will become one of the first AC Hotels in the United States, a three-year- old European chain that is a joint venture between Marriott International and the Spanish hotel Group AC Hotels. “Technology allows us to be more efficient than previously,” he said. Some guests are not convinced. Rob Bullock is the executive director of the Government Finance Officers Association of British Columbia. In mid-February he stayed at the Cotton Exchange Hotel before a cruise. While there he noted noise traveling through the walls and up from the street. The beds were hard. He wrote in an email: “The staff was great. They listened intently and tried their best to resolve things. They brought us more pillows, extra sheets, but the hotel was sold out and there was little else that could be done.” On the return trip he opted for a competitor’s traditional chain hotel where the bed was more comfortable. He doesn’t plan a return to the Cotton Exchange. Mr. Patel says the scheduled renovation will include new beds, interior windows, bath fixtures and room walls. In Europe, the InterContinental Hotel Group has embraced repurposed buildings for economic reasons. “Banks are much more comfortable providing financing for buildings that are already there,” says Miguel Ruano, vice president for design and engineering, Europe-I.H.G. The Marseille-Hotel Dieu, which opened last April on the site of an 18th-century hospital that had been vacant for decades, also includes a collection of artifacts found during renovation. Even the federal government is tiptoeing into repurposed hotels. Last June, after a competitive bidding process, the General Services Administration reached an agreement to lease the Old Post Office building, at 12th Street and Pennsylvania Avenue in Washington, to the Trump Organization for 60 years with the option to renew. The chain estimates it will spend $200 million converting the building to a luxury mixed-use development, including a hotel, museum, visitor center and retail space. Experts say the architectural features and details can convey more of a homey feel, a sense of individuality. “In saying to a taxi driver, please take me to a specific hotel, the guest is telling the driver something about themselves,” says Mr. Harteveldt. A version of this article appears in print on March 11, 2014, on page B6 of the New York edition with the headline: Hotels Moving Into Old Buildings. .